Ireland urged to ‘green’ economy, tackle health and housing challenges

The Republic should invest in the greening of its economy and tackle long-term structural problems in the areas of health, housing and inequalities to fuel its recovery from the economic slump caused by the Covid pandemic which is expected to be the worst in a century, said the European Commission. .

“We are facing a shock unprecedented since the Great Depression. Its economic and social consequences pose political challenges like we have never seen in our lifetime, ”said European Economic Commissioner Paolo Gentiloni. “At the same time, the sustainability and competitiveness challenges we faced before the crisis have not gone away … So as we look to the future, our investment and reform goals must remain focused on successful green and digital transitions. “

He spoke as the EU’s executive body unveiled its periodic advice to member states on how to reform their economies to address structural issues, work towards carbon neutrality and increase economic growth.

The impact of the pandemic is expected to be severe, increasing unemployment to 7.4% this year and requiring government spending that will lead to a large deficit that will bring Ireland’s debt-to-GDP ratio to 69.1%, according to the 2020 Stability Program.

The commission warned that there was a risk that the pandemic would worsen inequalities between different regions of the state, and said investments would be needed to counter this.

It comes a week before the EU presents a stimulus fund proposal for the bloc to counter the effects of the pandemic. This is expected to amount to more than a trillion euros in the form of loans and grants to member states.

It will be linked to the EU’s seven-year budget, which the committee proposes to use to fund a continent-wide transition to a green and digitized economy, and its goal of carbon neutrality in the bloc by now. 2050. Mr. Gentiloni said that, unlike the response to the financial crisis of the past decade, more spending would be needed to achieve these goals.

“It will be vital to avoid making the mistakes of the past. In the fiscal consolidation of 10 years ago, investment was the first victim. To repeat this approach would sacrifice our long-term priorities. “In short, we need a well-funded stimulus package. We will present it next week.


1. Implement Sláintecare

“Before the Covid-19 pandemic, hospitals were already operating at almost full capacity, with the occupancy rate of acute care beds among the highest in OECD countries,” writes the commission report. “This was mainly due to the lack of universal access to primary care and a heavy reliance on hospital care.”

“In the medium term, Ireland has yet to address the structurally limited efficiency, flexibility, resilience and accessibility of its health system,” the report writes. He notes that there is a plan for this under the Sláintecare program, but that “plans for its implementation remain vague”.

2. Build houses

While housing construction has increased, the committee notes that it still lags behind demand and that 68,700 households were on waiting lists for social housing at the end of last year. “Housing affordability is a problem for many households, and inflation in the rental sector is still high. Improving infrastructure, combined with land use planning, could be a key catalyst for improving housing supply.

3. Reduce emissions

The committee said Ireland is on the verge of missing its 2020 renewable energy and energy efficiency targets, is heavily dependent on imported energy and has some of the highest electricity costs in the EU.

“Ireland has so far fallen behind in the fight against decarbonization. Greenhouse gas emissions in transport and buildings are high and remain on an upward trend. Ireland will not meet the 2020 targets for energy efficiency and renewable energy.

“Ireland’s transformation to a climate neutral economy will require significant private and public investments over an extended period in renewable energy, power infrastructure, energy efficiency and sustainable transport. “

The report describes the government’s climate action plan as “credible” but requiring “effective and sustained implementation”.

4. Improve broadband

Improving broadband infrastructure is key to increasing the competitiveness of small businesses, advises the committee. “Ultra-fast broadband is only available in 5% of rural premises, well below the European average of 29%, and Ireland is also one of the most expensive countries in the EU for fixed broadband. ”

5. Fund research

According to the commission, support for research and development tends to go to international companies rather than local talent.

“Although Ireland provides a relatively high amount of public support to businesses, this support is implemented through a research and development tax credit scheme, which tends to favor large foreign companies. and has a limited effect on improving the productivity of local Irish people. companies. ”

6. Fight against tax evasion and money laundering

According to the commission, while Ireland has taken steps to tackle aggressive tax planning, there are signs that multinationals are still using the state to reduce their international tax burdens.

“The high level of royalty and dividend payments as a percentage of GDP suggests that the Irish tax rules are used by companies engaged in aggressive tax planning.”

He recommends Ireland broaden its tax base, noting that 45 percent of corporate taxes are collected from just 10 companies, leaving the state highly vulnerable to “economic fluctuations and idiosyncratic shocks.”

He warns Ireland is at high risk of being used for money laundering due to its internationally driven economy, and says monitoring of the matter is “insufficient”.

7. Correct the inequality

He found that the government should invest in increasing the skills of its workforce to enable people to adapt to changing labor market needs and prepare for the transition to a green economy.

“The challenges Ireland faces with regard to poverty and the quality of employment and support, including for people with disabilities, remain, and they are likely to be exacerbated by the pandemic.”

The commission warned that the pandemic could worsen regional inequalities in Ireland. “The socio-economic consequences of the pandemic are likely to be unevenly distributed across regions due to different patterns of specialization. This poses a substantial risk of worsening regional disparities within Ireland. “

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